November 08, 2012

Blawgletter had the pleasure of trying a case in Louisiana state court last year. The subject matter -- a fight over oil and gas rights and 3D seismic data -- fit well within our legal wheelhouse. But something made us feel like a fish out of water.

The law in the Pelican State, you see, gets its roots from the civilian tradition of France, not the common law approach of merry old England. Civilian law puts heavy stress on statutes and gives less weight to court rulings. And the freedom that that seems to give lawyers and judges can unnerve people who know only the strictures of the common law. We tend to like turning sharp corners. But our Louisiana brethren and sisteren take pride (justly, we think) in going their own less rigid ways.

So what happens when the legal habits of mind from L'Hexagone cross paths with one of the greatest common law courts of modern times -- the Second Circuit?

Judging from the majority and dissenting opinions in Louisiana Stadium & Exposition District v. Financial Guaranty Co., No. 10-2030 (2d Cir. Nov. 6, 2012), confusion may reign. The panel dealt with the question of whether the owner of the Louisiana Super Dome could rescind a policy that insured municipal bonds it issued in 2006. The owner claimed that the "cause" for getting the policy consisted of saving more on interest payments than the $13 million premium it paid for the coverage. But the insurer went belly up, and its collapse dashed any hope for such a boon. And the owner sued for rescission and its money back.

The district court granted the insurer's motion to dismiss. The Second Circuit affirmed, by a 2-1 vote. The dissent pointed out that Louisiana law presents mysteries that common law judges cannot easily fathom and that the wiser course lay in asking the Supreme Court of Louisiana to opine on whether the Super Dome folks stated a basis for a refund.